Health Net 2010 Annual Report Download - page 171

Final Execution Version
If Supplier fails to meet a Service Level and establishes within two months after such failure that: (a) Health Net’s failure to
perform a retained responsibility was the root cause of Supplier’s failure to meet such Service Level (e.g., providing the required
infrastructure to host In-Scope Applications); (b) Supplier would have achieved such Service Level but for such Health Net
failure; (c) Supplier used Commercially Reasonable Efforts to perform and achieve the Service Level notwithstanding the
presence and impact of such Health Net failure; and (d) Supplier is without fault in causing such Health Net failure, then no
Service Level Credit shall be assessed against Supplier for any resulting Service Level Failure, and Supplier shall otherwise be
excused from achieving such Service Level for as long as Health Net fails to perform such retained responsibility and Supplier
continues to use Commercially Reasonable Efforts to prevent, overcome, or mitigate the adverse effects of such failure to the
extent required to achieve the applicable Service Level. Supplier shall not be excused from a failure to achieve a Service Level
other than under this Section 4.4 or as expressly provided in this Agreement.
(c) Supplier shall not be relieved for any Service Level Failure caused by a Managed Third Party if such Service Level Failure
arises from Supplier’s failure to manage such Managed Third Parties in accordance with the terms and conditions of this
A
g
reement.
4.4 Excused Service Level Failures
4.5 Service Level Credits
(a) Calculation. For each Critical Service Level Failure, the applicable Service Level Credit referenced in Section 4.3(b) above
shall be calculated in accordance with the followin
g
formula:
Service Level Credit = A x B
Where:
A = the a
pp
licable Wei
g
htin
g
Factor; and
B = the Amount at Risk for such calendar month.
(b) Notification. For each Critical Service Level Failure, Supplier shall report such failure to Health Net pursuant to
Section 17.3(b) of the Terms and Conditions and Section 3.3 of this Schedule B. Such report will, at a minimum,
(i) identify and describe as a “Critical Service Level Failure” such Critical Service Level Failure, and (ii) calculate the
amount of the corresponding Service Level Credit, calculated pursuant to Section 4.5(a) of this Schedule B, that Health Net
ma
y
elect
p
ursuant to Section 4.3(b) of this Schedule B.
(c) Limitations.
(i) In no event shall the sum of the Weighting Factors for all Critical Service Levels exceed the Pool Percentage
Available for Allocation.
(ii) In no event shall the total amount of Service Level Credits payable by Supplier for Critical Service Level Failures
occurrin
g
durin
g
a calendar month exceed the Amount at Risk for such calendar month.
Schedule B
B -5 Health Net/Co
g
nizant Confidential